What is meant by market equilibrium?

Market equilibrium refers to the state in which the quantity of a good or service that consumers are willing to purchase matches exactly with the quantity that producers are willing to sell. In this situation, the market clears, meaning there is no surplus or shortage of the good. The price at which this occurs is known as the equilibrium price, and the quantity is the equilibrium quantity. This balance is vital for the stability of the market, as it ensures that resources are allocated efficiently. When the market reaches this equilibrium point, both producers and consumers are satisfied, as producers can sell their entire output at a price that consumers are willing to pay.